Holiday potpourri
December 7, 2001 | 12:00am
Ebay continues to astonish. Its share price has also risen as analysts predict a strong holiday quarter. It seems many global Christmas shoppers are bidding (no, make that "shopping") for presents at this most successful of all Internet companies. In fact, I read somewhere that out of the 200 or so "listed Internet promises" that have been spawned through the last four or five years, only one of these promises has lived up to expectations. You guessed it. Ive done my share of "shopping" at Ebay too. In fact, Ive won maybe 12-15 separate auctions for various items, mainly rare first edition holographic Pokemon cards for my kids. The only problem is that the credit card payment system employed by Ebay (Paypal) only works for U.S.-based card holders. Its a good thing Ive still got my U.S. dollar account.
Now as all of us stock watchers know, the U.S. markets have recovered beyond their September lows, with the Dow pushing over the 10,000 mark and the Nasdaq over the 2,000 as of this writing. This mini-bull run has been led to a large degree by tech stocks. In particular, semiconductor players (referred to as chipmakers by numerous analysts) have done their share in pushing the various indexes. Analysts, in fact, believe the bottom has been reached in this sector, with the sales effects of this bottoming to be reflected in the February 2001 numbers. If I recall correctly, some big players like Taiwan Semiconductors are already showing slight upticks in their monthly sales levels. Looking at the Philadelphia Semiconductor Index, which is a price-weighted index composed of 16 U.S. semiconductor companies primarily involved in the design, distribution, manufacture and sale of semiconductors, the index is up almost 200 points from its September lows, to around 570 as of this writing. In our local bourse, the two listed semiconductor companies are Ionics and Music. For both, the U.S. recovery is the critical driver. As of this writing, Ionics last traded at P7.10, above its P5.60 52-week low but off its one-year high of P17.25. For Music, its now trading at 45 centavos, above its 30-centavo low a few weeks ago but not even 10 percent of its P5.50 one-year high.
Based on the latest reports, the U.S. Economy has been in recession since March of this year. So by the second half of 2002, when most analysts are expecting a full recovery, the U.S. Economy would have been in recession for almost a year-and-a-half. The big question is will the upswing by second half of next year materialize or not. Some analysts are getting very nervous. Morgan Stanleys stock guru Barton Biggs is one of them. Biggs lashed out on the Markets recent euphoria, indicating that it is "pure madness that the tech bubble is being inflated again." While Biggs believes this current bear markets lows were hit during the panic selling after Sept. 11, he said that the "celebration" taking place is "excessive and premature." Im just wondering, "Arent we smarter now?" I sure hope the Markets have learned from the past excesses.
On a sad note, ExciteAtHome (ATHMQ), the high-speed Internet service provider and portal, is shutting down in 90 days. This is a company which once held a mighty market cap of $40 billion. In my last trip to Silicon Valley, I remember passing their beautiful office along the stretch toward San Jose. That prime office space is going to be up for lease very shortly a very sobering reminder for all of us to move with caution in these trying times.
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